Teresa Kelly, 35, of Ocoee, Fla., worked as a operations supervisor in Colonial Bank’s Mortgage Warehouse Lending Division and is one of four co-conspirators who have pleaded guilty so far in the case.

Kelly pleaded guilty before U.S. District Judge Leonie M. Brinkema to her role in the fraud scheme that lead to the failure of Colonial Bank and Taylor, Bean & Whitaker (TBW), once one of the nation’s largest mortgage providers. Kelly is expected to be sentenced in June.

Prosecutors say Kelly is part of a larger fraud scheme that TBW’s former chairman, Lee Bentley Farkas, is accused of masterminding. Farkas faces a 16-count indictment and is expected to go to trial in April, although his lawyers have asked for an extension.

According to court documents, Kelly admitted that from 2002 through August 2009, she helped in the conspiracy that allowed Colonial Bank to purchase more than $400 million in assets that had no value.

TBW ran overdrafts in its account at Colonial Bank because it couldn’t meet its payroll and service payments on its loans and mortgage-backed securities.

Kelly and her co-conspirators tried to cover up the overdrafts by sweeping overnight money from one TBW account with excess funds into another and making fictitious “sales” of mortgage loans to Colonial Bank, according to court documents.

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